Lowe’s Companies Inc. (LOW) – Rural expansion is expected to increase the market share and boost productivity

Lowes Companies Inc. (LOW) (Q2FY24)

Stock performance: Lowes Companies stock gave returns of -14.2% and 5.6% in the period of three months and one year. The stock has a 52-week high of $237.21 and a 52-week low of $176.50. The stock gave returns of 13.1% and CAGR of 4.2% over a period of three years. The stock had a 200-Day Moving Average of $211.32 and a 50-Day Moving Average of $216.72.

Quarter Performance: In Q2FY24, net sales declined by 9.2% to $24.96bn, compared to $27.48bn in Q2FY23. Prior year sales included $1.7bn generated by its Canadian retail business, which was sold in Q4FY23. Comparable sales in Q2FY24 decreased 1.6%, consisting of a 1.9% decrease in comparable customer transactions, partially offset by a comparable average ticket increase of 0.3%.

Guidance: LOW expects a total sales in the range of $87bn – $89bn for FY24 and comparable sales to be down -2% to -4% as compared to prior year. Operating income as a percentage of sales (operating margin) is expected to be in the range of 13.4% to 13.6%. Interest expense of approximately $1.5bn. Effective income tax rate is expected to be approximately 25%. Lowe’s Companies expect a diluted EPS in the range of $13.20 – $13.60 and a capital expenditure of up to $2bn in FY24.

Highlights

LOW is using perpetual productivity improvement (PPI) to improve its store operations. It has a number of initiatives on its road map that will continue to deliver productivity for the company. In addition to the omni-channel enhancements, the company has also upgraded its freight flow process for shipments from its distribution centers into its stores and on to the selling floor.

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Highlights

Valuation

– Enterprise Value
– CrispIdea Forecast
– CrispIdea Segment Forecast
– Economic Value Added Analysis
– Discounted Cash Flow Analysis.
– P/E Analysis
– Peer Valuation
– CrispIdea Forecast Relative to Consensus
– Consensus History and Surprise
– Consensus Momentum

Actual & Historical Performance

– Income Statement
– Balance Sheet
– Cash Flow
– 10 Year Historical Performance
– Ratio Analysis
– Du Pont Analysis
– ROIC & ROCE Analysis
– Segment Performance
– Key Metrics
– M&A Deals

Peer Performance

– Summary
– Profitability
– Growth
– Price Performance

Ownership

Stock Price Performance

Crispidea Coverage

No of Pages: 38

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